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In football it is not just how much the club earns, it is also where it can expand.

By Tony Attwood

Working out how much each club earned from various sources is a difficult task, because clubs only reveal what they have to reveal – and then they do it as late as they can, in most cases.

But fortunately there are financial laws which require limited companies to make public declarations, and the Premier League do reveal how much they paid to various clubs each season for TV rights.

In what follows some of the figures don’t seem to look and feel right – but then the clubs don’t have to tell us exactly where each bit of money comes from, and they can put different income in different pots.

But my point here goes beyond this – I want to see where clubs can expand their income.  So it is not so much how much money each club has now.  But how much might it have in the future.

First, the background.

The Premier League gets its money from Sky and BT, plus a much smaller amount from the BBC.  The total is over £3bn.  Then there is £2bn overseas money over 3 years which is divided up equally between the clubs.

Additionally there is prize money (also known as merit money) which is dependant on the position the club finish in the league which is around £1.2m for every place a club finishes in the league.

Of the UK TV money 50% is divided equally between the clubs, and then 25% to each club according to where they finish, and 25% is given according to how many times the club is shown.

What you can see from this is the fact that while Man City fans against the FFP regs have been saying that the FFP regs just keep the big earners at the top of the league, this reward for excellence is exactly the same in the Premier League.  The more you are shown, the higher your place, the more money you get.

Then we have FA Cup money.   In each round the clubs get money.  So to take the last couple of rounds Arsenal got £900,000 prize money for winning the semi final and £1.8m prize money for winning the final.   And of course they got money for getting through each earlier round.

TV money is less – the winner might get £1m TV money in addition to the above – obviously the earlier you go out, the less prize and TV money you get.

In the Champions League every team gets money – just for being in the play off round you get €2.1m, while in the group stage each team gets €8.6m.  Additionally clubs get €1m for winning a game and €500,000 for a every draw in the group stages.   It gets higher in the later rounds.

Thus European TV and prize money means that coming in the top four of the PL is always better than winning the FA Cup or League Cup in terms of being able to buy players.  It is not a trophy, it is the way to pay for players, a new stadium or anything else you fancy.

Now I getting to my point.  European money is the result of coming in the top four and is utterly key to future development.  It is variable and dependent on the club’s results.  Top four gives you the money via Europe.

But other sources of income are not so much under club control.   The amount of gate money taken for matches is pretty much stuck, because most grounds are full and fully exploited.  Yes, win the FA Cup and you pick up some more gate money, but in the scheme of things, it is not that much.

On the other hand, although merchandising has a limit somewhere, for most clubs it can be extended with ever better as the club’s worldwide image expands.  So we begin to see the route to financial success – get a big ground, and then do the merchandising – while all the time try to stay in the top four.   And guess what, that is exactly what Arsenal has done.

Let’s try this with numbers…

Premier League payments to clubs for this season just finished we find…

  • 1 Liverpool £97,544,336
  • 2 Man City £96,578,329
  • 3 Chelsea £94,106,163
  • 4 Arsenal £92,870,080
  • 5 Tottenham £89,663,884
  • 6 Manchester United £89,161,831
  • 7 Everton £85,027,727

The difference from top to bottom is not massive.  OK it is £12m, but in the context of things, that is not huge.  (And remember, overseas TV money is shared equally; it doesn’t matter how much you are shown, you still get your equal share of the £2bn).

So go up the league and popularity stakes a bit, get shown on TV a bit more and the Premier League pays you a bit more – but the difference of going up from 4th to 1st does not earn you much money.   Exactly the same as with the FA Cup.  Yes there is more money but not a huge amount.

But now look at gate and match day receipts per club per year.

  • Liverpool £42m
  • Man City £22m
  • Chelsea £78m
  • Arsenal £95m
  • Tottenham £75m
  • Manchester United £99m
  • Everton: £17m

These can’t go up much, because building a stadium takes time – which is why clubs like Everton, Liverpool, Chelsea and Tottenham are so desperate to buy a new ground each.  (Incidentally, the Tottenham figure looks suspiciously high to me, but that’s what they say in their accounts, and they do have the highest gate prices in the world).

Incidentally these figures are a year old, so the next lot will see Arsenal rising because of this season’s FA Cup.

Finally commercial activities

  • Liverpool: £64m
  • Man City: £121m
  • Chelsea: £70m
  • Arsenal £52m
  • Tottenham £18m
  • Manchester United £118m
  • Everton £11m

Now this begins to paint an interesting picture, because here we see only the second area where the club can do a lot to affect its own position.  Commercial activities range from selling copies of my books in the Arsenal shops (not enough to keep me in luxury sadly) through to doing deals with shirt sponsors and stadium namers.

Arsenal’s figures are lower than they might have been because only now are we negotiating new sponsorship contracts after the flurry of getting money to pay for the stadium when it was built.   Arsenal’s new deals are much more valuable than those signed last time around, because the stadium is there, established, and working.

This is the area where Arsenal have space to earn more.  But what of the other clubs?  Everton, as we can see, are stuck, unless and until they can build and fill a new stadium.  But even then they will have years of going through what Arsenal did after building the Ems – paying for it.  Yes the stadium is necessary, but no it doesn’t solve all your problems on day one – unless you have an oil state as an owner.

I also think Tottenham’s figure is low here – and that some of the match day money should be in this pot, but you get the idea.

Man U’s worldwide marketing is legendary, but is now overtaken by Man City because of the huge sums the owners of the club can pay themselves for things like naming rights, and expertise rights which are sold between the companies they own (which is where FFP tripped them up).  Trading with yourself is ok, but it is not like selling stuff to outsiders.

Liverpool are showing more income from commercial activity than Arsenal, with Liverpool trading on their past Euro glories, as of course they should.  But they have milked that as far as it can go, and there is no way they are going to expand their marketing money without winning a whole string of trophies and building a new stadium – and even then, they won’t have the money for seven years because they will be paying for the stadium.

So this is my point.  We see the numbers from the past but have to look to the future as well.  The question is always, what bit can you expand and how quickly.  And this is where some clubs get very stuck.  Indeed I would say that it is now harder for Man U to expand its marketing deals because it has been at the top of the market for so long.  Arsenal however are still climbing.

 

16 comments to In football it is not just how much the club earns, it is also where it can expand.

  • Mick

    Tony, I am surprised that Man City top the commercial activities table given their only recent rise to prominence. Would I be right in assuming that is because of artificially inflated deals with companies owned by the owners themselves, eg stadium naming rights.

  • Mick

    Sorry Tony, continued reading and all was explained!!!

  • TommieGun

    Sorry for being totally off topic, but had to post this – a proof how badly we were fucked by injuries compared to other clubs, in a “realtively” non hateful source (eurosport.com)

    https://uk.eurosport.yahoo.com/blogs/pitchside-europe/proof-arsenal-were-unlucky-injuries-weren-t-only-185533568.html

    So, it seems that our 1716 days of injuries, are 300 MORE than Aston Villa, in second place (who did not play in the CL).

    Compared to KGB (556), Shitty (929)and Manure (1146)- we were totally screwed.

  • WalterBroeckx

    Always read till the end Mick 😉

    If I can remember correct I thought that the new commercial deals with Emirates and Puma were good for something between an extra 30-50M a year in commercial income. That should become visible from this summer I think. And it would put us just under the Manchester clubs. And who knows what will follow in the next months/years?

  • Kelser

    There are good times ahead. We’ve said our own way. We can be proud of who we are! Keep up the great work, Untold!

  • insideright

    Building a new stadium and then filling it every match has pretty much proved impossible for anyone until Arsenal mananged it. Filling it at (relatively) high prices would for anyone else provide another, pretty well impossible, target.
    Despite all the moans and groans of the naysayers Arsenal fans (this time around – not like the mid 70’s) stuck with the Club and have seen it through.
    Going out of their way to thank the fans during the Cup Final parade was an absolutely correct thing to do by the Club and it reflects a new marketing ethos since Kroenke took over.

  • nicky

    If only we could now have wage-capping, lower ticket prices and a ban on the annual con of new home and away shirts!
    Dream on 🙂

  • It also matters what you sell and how its perceived,

    Man Utds training ground/complex and training kit sponsorship deal with a AON – it is a very very big deal for what is basically something that gets shown in tv occasionally and gets mentioned occasionally, which unlike stadium naming and playing kit sponsorship isn’t that big. Yet what irks is that apart form a few official sites where they mention it as AON training complex they don’t mention it anywhere. Most articles from the time this deal was agreed mentioned it still as carrington complex, not aon complex. What I am trying to say is the sponsors are screwed or a club like arsenal is screwed because our stadium gets refered to in all articles as the emirates yet whenever manu’s training complex is mentioned it gets the name carrington training complex.

    Its something similar to what Newcastle went through, they sold their naming rights to stadium still everyone referred it to as St. James park for the 2 yrs that sponsorship was in place.

    Imagine SAFs last goodbye meetings described in all media articles as ” the man who nurtured the youngsters paths from carrington to old trafford” read as ” the man who nurtured the youngsters paths from AON training complex to old trafford” – there is a different ring to it. Yet everyone conveniently called it carrington and the sponsors dont seem to care as well.

  • Karan

    i have absolutely no doubt we can compete for the prem lge and champs lge if we spend and buy the players we require this summer.plenty of positives from last season in terms of we kept 16 clean sheets and had the best away record in terms of wins in the prem lge.only one home defeat all season, and major injuries to rambo,walcott,wilshere,ozil and kos these last few months took its toll on a squad reliant on its best players.in saying that any club in the world would suffer just that wouldn’t they.so we won our first major trophy in 9 years and just finished 7 points of the top with just one striker all season-giroud.it would not suprise me if wenger got 2 forward players this summer because when you look at his general history at afc,then attacking free flowing football is his main philosophy.we only scored 68 goals,that aint the wenger high scoring teams we grew to love is it.we had to be more conservative this season than ever and not buying or getting another striker cost us big time.for what it’s worth,but if we get a benzema,di maria,bender/martinez and replace sanga and fabianski, then i’ll be more than glad to back the team for the prem lge next season. i do think this club can now take off and reach the heights it should as long as we buy some top class players. I’m very optimistic because we aren’t that far off.

  • Tony,

    Reading this piece takes me back to your articles from when I started following Untold Arsenal, circa 2008/9. You used to write a lot of stuff like this then and that was how I fell in love with this site.

    A cracking piece and one that vindicates those of us who have been appealing for calm when others were setting their hairs on fire over the club’s frugal spending, screaming for us to sell our souls to win a trophy.

    I have no doubts that our gate takings this season and funds from financial activities will take us very high up indeed. We have turned the corner. It is our time. This is the Arsenal era and it is going to be a long one.

    As I have always said: it is more important to be financially stable and growing than to stake everything on winning a trophy. As long as there is financial stability and growth, the trophies will come. Big rich teams always win trophies. FACT!!!

    Arsenal is a big, rich club and we have just won the first of many trophies to come.

  • blacksheep63

    indeed we are rich club Bootoomee so it is a shame that ST prices have gone as much as they have and that OAPs do not get a discount. Ivan Gazidas declared last season that we could compete with Bayern but we certainly don’t compete in terms of the best deal for our fans.

    Not that it stopped me renewing mine seat however

  • Notoverthehill

    Tony, I would suggest the figures you use are somewhat out of date?

    Manchester United Financial Accounts for 2012/2013, inform us that:

    Commercial was £152.4 millions
    Broadcasting was £101.6 millions
    Matchday was £109.1 millions

    a breakdown is given as follows:

    FA Premier League was £63.9 millions
    Nike was £38.6 millions and
    UEFA was <10%

    Manchester United FC are a cash cow, and are now subject to US federal income tax. Which raises the question, are MUFC tax dodgers?

  • blacksheep63,

    It is not my intention to be an insensitive jerk here but I have always seen STs as luxuries. I am sorry if I sound crass. I respect ST holders for their financial commitment to the club but my perception has always been that they are ST holders because they can afford to. Seating behind my TV, I always mutter: “you lucky bastards” when I see Gooners at the Emirates.

    I don’t go as to many games as I wish to (about 5 or 6 per season in all competitions) because I can’t afford to; and I am not talking about the tickets alone. I make up for it by paying my annual membership fees as well as those of my 3 fellow family Gooners. We also buy merchandise and all of these increase with inflation just like the Season Ticket prices. I don’t think that a 3% increase in 3 years is that bad. I am not encouraging the club to increase any price but that increase is less in percentage than what I get on all my other utilities every year!

    Considering that fans are always siding with players during wage negotiations saying “just pay them what they want” as is currently happening in the Sagna case and considering that all our players have been put on long and lucrative contracts (which are not 3% increments by the way), I am willing to cut the club some slack on a 1% average price increase per year.

    May all you great Arsenal ST holders continue to do well financially so that you will continue to afford the tickets and whatever price increase that they might incur. We the masses hope to join you there sometime soon 🙂

  • Micheal Ram

    All organization will go through transition period for future stability. We might have won the FA Cup but still the transition is not ended yet. The team of Stan, Ivan and Arsene will further improve the club to reach its full potential and it will take a few more years. Im here to stay and patience enough to see the club to become the best club in the world.

  • oldgroover

    OAP’s get discounted season tickets, but only if they purchase them in the family section. For the first three seasons at the Emirates they were £495, not sure what they now are, but tickets for oldies (of which I’m one) in all other parts of the stadium are not discounted.

  • Will Rickson

    Yet more bias against Manchester City despite nothing being done after investigation during the FFP process almost wish City would take people to court for this rubbish but City have too much class not enough tine unless your even more clear in your bias then you can carry on getting away with it